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 of the silver mines of Copiapo and the coal mines of Lota, by the building of railways and erection of telegraphs, and by the colonization of the rich Valdivia province with German settlers.

The Straits of Magellan were occupied; under an American engineer, William Wheelwright, a line of steamers was started on the coast, and, by a wise measure allowing merchandise to be landed free of duty for re-exportation, Valparaiso became a busy port and trading centre; while the demand for food-stuffs in California and Australia, following upon the rush for gold, gave a strong impetus to agriculture. A code of law was drawn up and promulgated, and the ecclesiastical system was organized under an archbishop appointed by the pope. To Montt, as minister under Bulnes and afterwards as president, must be given the main credit for the far-seeing policy which laid the foundations of the prosperity of Chile; and though the administration was in many ways harsh and narrow, firm government, rather than liberty that would have tended to anarchy, was essential for the success of the young republic.

After 1861, however, a Liberal reaction set in, aided by divisions in the Conservative party arising mainly over church questions. Montt’s successors, José Joaquin Perez (1861–1871), Federico Errázuriz (1871–1876) and Anibal Pinto (1876–1881), abandoned the repressive policy of their predecessors, invited the co-operation of the Liberals, and allowed discontent to vent itself freely in popular agitation. Some democratic changes were made in the constitution, notably a law forbidding the re-election of a president, and the gradual and peaceful transition to a Liberal policy was a proof of the progress which the nation had made in political training. Outside the movement for constitutional reform, the most important internal question was the successful Liberal attack on the privileged position and narrow views of the Church, which led to the birth of a strong ultra-montane party among the clergy. The government continued to be animated by a progressive spirit: schools, railways, telegraphs were rapidly extended; a steamship mail service to Europe was subsidized, and the stability of the government enabled it to raise new foreign loans in order to extinguish the old high interest-bearing loans and to meet the expenses of public works. In 1877 a financial crisis occurred, met by the emission of paper money, but the depression was only temporary, and the country soon rallied from the effects.

During this period there was desultory fighting with the Indians; there was a long boundary dispute with the Argentine, settled in 1880; and in 1865 Chilean sympathy with Peru in a quarrel with Spain led to a foolish war with Spain. The blockade of their ports and the bombardment of Valparaiso by a Spanish squadron impressed the Chileans with the necessity of possessing an adequate fleet to defend their long coast-line; and it was under President Errázuriz that the ships were obtained and the officers trained that did such good service in the great war with Peru. With a population of over two millions, a rapidly increasing revenue, ruled by a government that was firm and progressive and that enjoyed the confidence of all classes, Chile was well equipped for the struggle with Peru that began in 1879.

The war of 1879-82 between Chile and Peru is the subject of a separate article (see ). By the beginning of 1881 the war had reached a stage when the final struggle was close at hand. On the 13th of January of that year the Chilean forces under command of General Baquedano attacked the entrenched positions of the Peruvians at daybreak in the vicinity of Chorillos, a village some few miles from Lima, and forming the outer line of defence for the capital. After a stubborn fight the day ended in victory for the attacking forces; but the losses on both sides were great, and on the following day negotiations for peace were attempted by the representatives of the foreign powers in Lima, the object being to avoid, if possible, any further bloodshed. This attempt to end the conflict proved, however, abortive, and on the 15th of January at 2 hostilities recommenced in the neighbourhood of Miraflores. After severe fighting for some four hours the Chileans again proved victorious, and drove the Peruvians from the second line of defence back upon the city of Lima. Lima was now at the mercy of the Chileans, and on the 17th of January a division of 4000 men of all arms, under the command of General Cornelio Saavedra, was sent forward to occupy the Peruvian capital and restore order within the town limits. A portion of the Chilean forces was shortly afterwards withdrawn from Peru, and the army of occupation remaining in the conquered country was in charge of Admiral Patricio Lynch, an officer who had been specially promoted for distinguished services during the war. President Anibal Pinto of Chile now set about to find means to conclude a treaty of peace with Peru, but his efforts in this direction were frustrated by the armed resistance offered in the country districts to the Chilean authorities by the remainder of the Peruvian forces under command of General Cáceres. So matters continued— the Chileans administering on the seaboard and in the principal towns, the Peruvians maintaining a guerilla warfare in the mountainous districts of the interior. In September 1881 the term of office of president Pinto expired, and he was succeeded in the post of chief executive of Chile by President Domingo Santa Maria. Ex-President Pinto died three years later in Valparaiso, leaving a memory respected and admired by all political parties in his country. The name of Pinto will always occupy a prominent place in the annals of Chilean history, not only because the war with Peru took place during his term of office, but also on account of the fact that it was largely due to the intelligent direction of all details by the president during the struggle that the Chilean arms proved so absolutely successful by land and sea.

Señor Domingo Santa Maria, who now acceded to the presidency of Chile, was a Liberal in politics, and had previously held various important posts under the government. Under the rule of President Montt he had been an active member of the opposition and involved in various revolutionary conspiracies; for his participation in these plots he was at one time exiled from the country, but returned and received official employment under President Perez. The principal task confronting President Santa Maria on assuming the presidency was to negotiate a treaty of peace with Peru and provide for the evacuation of the Chilean army of occupation. The presence of the Peruvian general Cáceres and his forces in the interior of Peru prevented for some two years the formation of any Peruvian national administration in Lima with which the Chilean authorities could deal. In August of 1883 the Peruvians were defeated by the forces commanded by Admiral Lynch, and a government was then organized under the leadership of General Iglesias. A provisional treaty of peace was then drawn up and signed by General Iglesias and the Chilean representative, and this was finally ratified by the Chilean and Peruvian congresses respectively in April 1884. By the terms of this treaty Peru ceded to Chile unconditionally the province of Tarapacá, and the provinces of Tacna and Arica were placed under Chilean authority for the term of ten years, the inhabitants having then to decide by a general vote whether they remained a part of Chile or elected to belong once more to Peru. In the event of the decision being favourable to Peru a sum of 10,000,000 dollars was to be paid by Peru to Chile. On the ratification of this treaty the Chilean forces were immediately withdrawn from Lima and other points of occupation in Peruvian territory. The government of Bolivia also attempted to negotiate a treaty of peace with Chile in 1884, and for this purpose sent representatives to Santiago. No satisfactory terms, however, could be arranged, and the negotiations ended in only an armistice being agreed to, by which Chile remained in occupation of the Bolivian seaboard pending a definite settlement at some future period.

The administration of President Santa Maria met with violent opposition from the Conservatives, who included the Clerical party in their ranks, and also from a certain section of the Liberals. The dislike of the Conservatives to President Santa Maria was occasioned by his introduction of the law of civil marriage, the civil registration of births and deaths, and the freeing of the cemeteries. Hitherto no marriage was legal unless celebrated